By Simon Johnson
One of the big problems in Greece over the past decade or so is that the government was not honest with its data. Various people assisted in the matter – including Goldman Sachs with respect to some debt issues – but ultimately this was a political decision at the highest level. The people running the country decided to conceal the true nature of their budget and their debt. This deception ended up costing the country dearly – completely undermining its credibility under pressure and making it much harder to turn the fiscal and economic situation around.
House Republicans are now proposing something similar for the United States.
Because this concerns deficits and debt, the details may seem arcane – and that is how similar details escaped attention by almost everyone in Greece. Fortunately, in the United States we have an excellent guide – an article in Tax Notes by John Buckley. (“Dynamic Scoring: Will S&P Have Company?,” February 28, 2012; at the moment this is available only behind their paywall but in the public interest I would strongly encourage Tax Notes to make this piece freely available – as they have in the past for other important articles.) Continue reading